1. MAURITIUS: THE KEY TO INVESTMENTS IN ASIA & AFRICA
Afsar Ebrahim
Partner: BDO (Mauritius)
Offshore Sector : The Mauritian Experience

2. Mauritius: On-shore Platform where Asia meets Africa
Facing the Challenges of Doing Business in Africa 2

3. Facing the Challenges of Doing Business in Africa3

4. Why Mauritius? Political stability and a good legal framework
Ultimate Court of Appeal is the Privy Council in the UK
Excellent telecommunication network
Well educated multilingual labour force (English and French) with a population of 1.2 million
No exchange control
Favourable time zone for Europe and Asia
Facing the Challenges of Doing Business in Africa 4

5. Mauritius International Financial Centre
Expertise in Global Business
Key Service Providers
Pool of Qualified Professionals
Competitive Edge
Ethics and Corporate Governance
Confidentiality
Regulatory Framework
Communication Network
Business Friendly Environment
Competitive Operation Cost
Wide Range of Financial Products / Services
Facing the Challenges of Doing Business in Africa 5

6. “Taxation is competitive and efficient.
Mauritius: Home of the Free. #1 in the Region Not a Tax Heaven but a Tropical Paradise
“Taxation is competitive and efficient.
The economy is increasingly diversified with significant private-sector activity in sugar, tourism, economic processing zones, and financial services, particularly in offshore enterprises.”
Wall Street Journal and Heritage Foundation,
2010 Index survey
Facing the Challenges of Doing Business in Africa 6

7. Mauritius International Financial Services Centre
INDIA: It started here. Bit it’s much more than that now
Approximately 77% of outbound investment from Mauritius goes into Asian countries
No. 1 FDI contributor in India
In 2011, nearly 44% FDI inflows routed through Mauritius platform
Increased Trade flows/business from India to Africa through Mauritius
Facing the Challenges of Doing Business in Africa 7

8. Our Banking Institutions
Facing the Challenges of Doing Business in Africa 8

9. Trading Platform
The Stock Exchange of Mauritius (SEM) is recognised by Her Majesty’s Revenue and Customs of the United Kingdom and the ability to list, trade and settle products in USD, Euro and GBP.
Global Board of Trade (GBOT), the first international multi-asset exchange from Mauritius, enhances the economic space for players looking beyond the shores of Mauritius with sophisticated mechanisms for hedging and risk mitigation tools for trading in commodity and currency derivatives.
GBOT has been achieving T+1 settlement.
Facing the Challenges of Doing Business in Africa

10. Legal System
Written Constitution based on the doctrine of separation of Powers
Ultimate Court of Appeal is the Privy Council in the UK
Hybrid Legal system based on French and English Laws
Ratified the New York Convention on the Enforcement of foreign Arbitral Awards
Facing the Challenges of Doing Business in Africa 10

11. Legal Framework Business & Corporate Laws
Companies Act 2001
Trusts Act 2001
Protected Cell Act 2000
Banking, Insurance and Securities Laws
Stock Exchange Act 1988
Banking Act 2004
Securities Act 2005
Fiscal Laws
Income Tax 1995
VAT Act 1998
Procedural and Administrative Laws
Financial Services Development Act 2001
Financial Reporting Act 2005
Insurance Act 2005
Criminal and Money Laundering
Financial Intelligence and Anti money Laundering Act 2002
Prevention of Corruption Act 2002
Prevention of Terrorism Act 2002
Facing the Challenges of Doing Business in Africa 11

12. Anti-Money Laundering Protection
Not on any OECD Black List
FSAP report by the IMF and World Bank positive on Mauritius
Up to date laws and regulation on Anti-Money Laundering
Facing the Challenges of Doing Business in Africa 12

13. Regulators Bank of Mauritius regulates all banking activities
Financial Services Commission (FSC) regulates all non-banking financial activities such as Insurance, the Stock Exchange and Global Business
Facing the Challenges of Doing Business in Africa 13

14. Treaty Network: 35 DTAAs in force (*7 Treaties awaiting ratification)
Europe
Belgium
Cyprus
Croatia
France
Germany
Italy
Luxembourg
Sweden UK
Russia*
Asia
China
India
Malaysia
Nepal
Pakistan
Singapore
Sri Lanka
Thaïland
Bangladesh
Vietnam*
Middle East
Kuwait
Oman
United Arab Emirates
Qatar*
Caribbean region
Barbados
Africa
Botswana
South Africa
Lesotho
Swaziland
Madagascar
Tunisia
Mozambique
Uganda
Namibia
Zimbabwe
Rwanda
Malawi*
Senegal
Nigeria*
Seychelles
Zambia* 14

15. Investment Promotion and Protection Agreements (IPPAs)
IPPAs are bilateral agreements between governments to promote Mauritian investment overseas
It act as a mainstay in investment whilst curbing the level of risk between countries
Mauritius has concluded 36 IPPAs worldwide; 22 are currently in force among which eminent African countries (South Africa)
IPPAs help Mauritius enhance its doing business environment and position Mauritian Investment on the international arena
Facing the Challenges of Doing Business in Africa

16. Global Business – Legal Entities
Private and Public Companies
(Companies limited by shares, guarantee or both)
Limited Life Companies (LLCs)
Partnerships
Trusts
Protected Cell Companies (PCCs)
Global Business – Legal Entities
Facing the Challenges of Doing Business in Africa 16

17. Global Business – Legal Entities
Limited Life Companies (LLCs)
Similar to US ‘Partnerships’
Venture capital, investment funds, real estate projects
Limited to 50 years (may be extended to 150 years)
Protected Cell Companies (PCC)
Statutory segregation of assets and liabilities
No minimum capital requirement
Added flexibility for structuring international investments
No limit on number of cells
May be used for:
Asset holding
Structured Finance Business CIS
Closed-ended Funds
Insurance Business
Facing the Challenges of Doing Business in Africa 17

18. USES OF A MAURITIAN OFFSHORE COMPANY
Provides control and coordination of a group of international subsidiaries
Provides an advantageous entry and exit point
Holds patents and facilitation of exploitation through (sub) license
Grants loans to group companies as a (intermediate) finance company
Provides a vehicle for securitization and captive insurance purposes
Provides a vehicle for cross border insurance
Acts as a holding and trading company
Provides an advantageous entry and exit point for investments in Asia and Africa
Facing the Challenges of Doing Business in Africa 18

19. Global Business – Use of GBC’s 1
No limitation on activities
Range of activities include:
Investment Holding
Fund Management / Collective Investment
Scheme
Consultancy Services, Employment Services
Logistics and Marketing
Aircraft Leasing and Financing
Shipping and Ship Management
Licensing and Franchising
Pension Funds
Insurance
Legal / Tax Services
Servicing international clients:
Financial Advisers
Asset Managers
Investment Brokers
Investment Dealers
Insurance Brokers
Pension Scheme Managers
Pension Scheme Administrators
Facing the Challenges of Doing Business in Africa 19

20. GBL 1 Companies GBC 1 companies tax resident in Mauritius
Have access to DTA network
Financial statements in accordance with IFRS or internationally accounting standards
Financial statements need to filed within six months of the financial year
No par value shares are permitted
There are no restrictions on the amount of share capital
Facing the Challenges of Doing Business in Africa 20

21. Taxation of GBL 1 Companies
Resident based taxation
Tax at the nominal rate of 15%
No capital gains tax in Mauritius
No thin capitalisation rules
Facing the Challenges of Doing Business in Africa 21

22. Tax Credit System
Deemed Foreign Tax credit of 80%, resulting in an effective rate of 3%
Foreign tax credit for taxes paid on foreign source income
Facing the Challenges of Doing Business in Africa 22

23. Tax residence – Control and Management
The Company shall at all times have at least two Directors resident in Mauritius. The resident directors shall be of appropriate calibre who can exercise independence of mind and judgement
All meetings of the Board of Directors shall be held, chaired and minuted in Mauritius
The Company shall at all times keep all its accounting records at its registered office in Mauritius
The Company shall ensure that all its banking transactions are channelled through a bank account
Facing the Challenges of Doing Business in Africa 23

24. Enhancing Substance in Mauritius
One physical board meeting per year
Majority of directors based in Mauritius
Foreign Directors
Telephonic board meetings and written resolution
Casting vote of Chairman
Substance office with dedicated telephone and fax lines
Facing the Challenges of Doing Business in Africa 24

25. Tax Residence Certificate
Issued on an annual basis with payment of Global Business License
Effective date
Country specific
Non-compliance with local laws and regulation
Facing the Challenges of Doing Business in Africa 25

26. Master-Feeder Structure
Cayman
Master
Delaware
Feeder
US Exempt + non US investors
Mauritius
GBL 1
Indian SPV
PE / RE
Capital gains on sale of
shares: tax exempt
No dividend WHT
0% tax
Treaty:Mauritius/India
Dividends: 3% or lower
US Taxable Investor
Facing the Challenges of Doing Business in Africa 26

27. The Global Business Company Category 2 (‘GBC 2’)
GBC 2 companies are regulated by the Companies Act 2001
It enjoys a very flexible regime and is regulated by the Financial Services Commission (FSC)
Used mainly for Investment holding and International trading
Facing the Challenges of Doing Business in Africa 27

28. Important Features of GBC2s (I)
GBC 2 companies are exempt from income tax
No withholding tax on outward remittances
No requirements for audited accounts and annual returns
No par value shares are permitted
There are no restrictions on the amount of share capital
Facing the Challenges of Doing Business in Africa 28

29. Important Features of GBC2s (II)
The company must have a local registered agent
The company may have only one shareholder and one director
Corporate directors are permissible
No exchange control requirements
Facing the Challenges of Doing Business in Africa 29

30. Important Features of GBC2s (III)
Limited life companies are permissible
Continuation of a foreign company is allowed
The GBC 2 does not have access to Double Taxation Treaties
Nominee shareholders are permissible
Information on GBC2s not available to the public
Facing the Challenges of Doing Business in Africa 30

31. Destination Banking – Buying Property in Mauritius
Non-nationals allowed to acquire residential property in Mauritius under special schemes - Integrated Resort Scheme (IRS) and the Real Estate Scheme (RES)
IRS offered at USD 1M minimum with acquirer automatically granted residence permit
RES has no minimum price but it does not confer automatic permanent residency but can apply for residency through an Occupation Permit or Residence permit if investment is above USD500k
Facing the Challenges of Doing Business in Africa 31

32. Capital contribution in insurance policy
Destination Banking – Buying Property in Mauritius Proposed Company Structure for Villas
Owner
Capital contribution in insurance policy
Loan
Seychelles Trust
or Company
Loan
Mauritian Company
Facing the Challenges of Doing Business in Africa 32

33. THANK YOU
Facing the Challenges of Doing Business in Africa